Moulton v. Holmes

McKee, J.: This was an action brought by the plaintiffs, as executors of the estate of B. F. Moulton, deceased, to set aside a settlement of accounts between the defendants Holmes and Moore, and a release executed in consideration thereof, and to compel an accounting of the dealings and transactions of Holmes in the management and sales of certain real estate held by him as the trustee of Moulton.

It was charged in the complaint, that the settlement was not for the benefit of the estate; that it was made without the authority of the executors and the approval of the Probate Court, and under a mistake as to the insolvency of Holmes, which was caused by false and fraudulent representations made by the latter for the purpose of cheating and defrauding the estate out of the moneys which he had in his hands belonging to it, and of appropriating them to his own use.

Holmes, in his answer, denied the allegations of the complaint. Upon the issues made by the pleadings, the cause was referred to a referee to take and state an account of the transactions of Holmes as the trustee of Moulton. Upon the coming in of the report, the Court below made and filed its findings of facts, and gave judgment for the plaintiffs for the sum of $57,545.66, with [340]interest and costs. But afterwards, upon a motion made by the defendant Holmes for a new trial, upon the grounds that the evidence was insufficient to justify the findings of the Court, and that the decision was against law, the Court ordered a new trial, and from the order comes this appeal.

Presumptively, the order is correct; and it is incumbent upon the appellants to show that the Court erred. They contend that it was error to grant a new trial, because the release, executed in consideration of the settlement between Holmes and Moore was voidable, if not void, for the reason that Moore had no authority from Moulton, or from the executors of his estate, to make the release, and it was never approved by the Probate Court.

The release itself was not so much the object of attack as the consideration for which it was given. Having been given in consideration of the settlement of accounts or transactions between Holmes and Moore, acting as the attorney of the executors, the object of the action was to impeach the settlement for fraud and want of authority.

The Court found that there was no fraud in the settlement, and that it had not been made or approved by the Probate Court. But it did not find that it had been authorized by the executors, although it found probative facts from which that fact ought to have been deduced. For it found, in substance, that Moulton was, in his lifetime, the owner of 113 lots of land in the city and county of San Francisco, and on the 14th of August, 1868, he conveyed them, by a contract in writing, to Holmes, for the sum of $90,000. Of this amount, $43,526 were paid at the time of the transaction, leaving due and unpaid a balance of $46,474, which, by the contract, Holmes agreed to pay as follows, namely: By buying in an outstanding title to_ some of the lots, “ on such terms as he and Moulton might agree upon,” and by putting them all in market and selling them from time to time as he could; and, after paying the unpaid purchase-money in that way, he agreed to divide the net proceeds of the sales equally between himself and Moulton, after payment of the expenses, etc., attending the management and sales of the property. Several sales were made under the contract, and a portion of the moneys realized from them was paid to Moulton.